2019-2020 Annual Report and Statement of Accounts

H istory will record the year 2020 as a watershed moment in our time, a time like no other for our generation. This period will be examined not merely by the impact of the unprecedented COVID-19 pandemic that is currently causing pandemonium across our world, but by our response. We must adopt a growth mindset, even as we tackle the health and economic crisis, lift our economies from the abyss and emerge stronger and more resilient. The Eastern Caribbean Central Bank (ECCB) recognises the gravity of this moment. A moment characterised by intense heartache as we mourn the loss of lives across the Eastern Caribbean Currency Union (ECCU) and in the diaspora, due to COVID-19. The health and human toll of the COVID-19 disease is compounded by its economic and financial fallout, as it continues to disrupt every facet of our everyday lives. As countries around the world and in the region moved to shut their borders and economies to safeguard lives, livelihoods became the second round casualties of the pandemic. Tourism ground to a halt, with devastating spill-over effects Navigating an Unprecedented Crisis Toward a Transformed and Resilient Region “In a crisis, be aware of the danger – but recognise the opportunity.” ~ John F. Kennedy

Governor’s Foreword

and our economies have been in free fall ever since. Unemployment is estimated to be as high as 50.0 per cent in some member countries. Revenues have plummeted by at least 50.0 per cent. At all levels of society, some of our best-laid plans have been confounded as we have all had to adjust to new ways of doing things and to embrace a new normal in this COVID-19 world. At the ECCB, we have been exploring all the tools in our policy arsenal and beyond, to respond swiftly to the COVID-19 crisis and the cries for help that came from our member countries: 1. In March 2020, we provided a $4.0 million grant to our countries – $500,000 each – towards procuring critical testing and medical equipment and supplies to deal with the immediate health needs and ensure quick containment of the coronavirus. 2. In March 2020, the ECCB increased the share of the fiduciary issue allocated to governments to 75.0 per cent from 60.0 per cent. This was to assist our member governments with closing their extraordinary financing gaps – estimated to be upwards of $2.2 billion to $2.7 billion. These gaping needs result from the significant revenue shortfalls and the care and relief packages implemented to mitigate the impact of the COVID-19 crisis on livelihoods. 3. Mindful of the need to provide concessionary financing, the Central Bank recommended a reduction in the discount rate to 2.0 per cent from 6.5 per cent. The discount rate is the rate at which the member governments and commercial banks borrow from the Central Bank. 4. The Bank continued its advocacy to the international community, on behalf of the member countries, for debt standstill and improved access to concessional financing as additional means for providing liquidity support. 5. In March 2020, the Bank supported the agreement reached by ECCU commercial banks to offer a six-month loan repayment moratorium to their customers to provide some financial reprieve. 6. As part of its financial stabilitymandate, the ECCB prepared regulatory guidance for licensed financial institutions to helpmanage the COVID-19 pandemic.

xi | EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2019-2020